As we approach the year 2000, the Millennium Bug--the computer glitch caused by some computers not recognizing the "00" in dates beginning 01/01/00 as 2000 instead of 1900 or 1980--has already spawned a number of lawsuits regarding Millennium Bug problems. So far, at least 50 such suits have been filed in various places around the country. The majority of these suits have been filed as class actions, and more are on the way. Below we will discuss several of these suits to focus on what you can do to better protect yourself from the Millennium Bug.
Before we start, however, it is helpful to have a basic understanding of class actions. A class action is a suit in which a plaintiff sues on behalf of himself and others similarly situated seeking relief on behalf of everyone in the class. The reasons plaintiffs file class actions are several. In some cases, the class actions are driven by the small size of the claim. If the plaintiffs were to sue individually, the amount of harm suffered by each in terms of dollars would make the suit not only economically burdensome to file and maintain, but the shear volume of such suits if brought individually would unnecessarily clog the courts. These cases are often referred to as "death-knell" cases, because if the court does not agree that the plaintiff's action should proceed as a class action, it is the death knell to the case since no reasonable lawyer would prosecute the action for the minimal sums involved.
A second type of class action is filed where one or both of the parties seek uniformity in the relations between the parties and others similarly situated. The device of a class action is then used to bind every possible plaintiff or defendant--except for those who opt out of the class, sometimes a cumbersome process all by itself--to whatever the result in the case may be, whether it be a settlement or a judgment. These suits often involve substantial sums of money so that the failure to certify the case as a class action does not necessarily mean the end of the litigation. Both of these types of class actions have come into play in Millennium Bug litigation to date.
One type of class action that has been filed with some regularity so far has to do with software for accounting systems. In the case of individual consumers, Intuit, the manufacturer of the popular Quicken accounting software for individuals and small businesses, has been sued based on alleged misrepresentations regarding the usefulness of its software. In particular, the on-line banking features of older versions of Quicken have come under scrutiny. Older versions of the software are not Y2K compliant. Nevertheless, the plaintiffs claim that Intuit marketed the software claiming that users could access their bank whenever they wanted, for as long as they wanted. Since the software is not Y2K compliant, it is claimed this statement was misleading and that Intuit should make a patch--a small program that repairs a glitch in a larger program--available to purchasers of the software free of charge. Because of the relatively small cost of the Quicken software, these cases are death-knell class actions.
Another type of class action involves more substantial dollar claims for software that is custom tailored to a particular market. This software, for example, is used to manage accounting, billing and scheduling for medical and dental practices. Some of the software packages were purchased at substantial cost (thousands of dollars) in the mid 1990s by doctors who still used DOS-based systems. These doctors were later informed by the software vendors that the software was not Y2K compliant, that the vendor was no longer supporting the software but instead was moving to a Windows environment, and that the only fix was to purchase new hardware and new software. Needless to say, these doctors are not happy. Because of the significant sums involved in each doctor's start-up costs, however, these are not death-knoll cases but often the defendants will want the case to be a class action to obtain a determination as to how it should govern its conduct toward each customer.
A third category of case was filed in an eastern state by a software manufacturer. The manufacturer sued one of its customers for declaratory relief to find out what its duties under its warranty would be in light of the looming Y2K crisis.
As a practical matter, these cases should be viewed with more than passing interest. For example, if you are a Quicken user, and millions of Americans are, you are a potential member of one of the plaintiff classes. If you are planning to purchase an upgrade of your software to become Y2K compliant, you may want to wait until later in the year to see what happens. Similarly, if you have invested a substantial sum in a software system within the past five years and you are being told you will have to upgrade again because the system is not Y2K compliant, you may have a claim against the vendor. There is, after all, evidence that awareness of the Millennium Bug has existed for more than 20 years. Indeed, Apple computers are not susceptible to it because it was not built into their systems.
With the Millennium Bug set to strike in less than 300 days, the time to act is now, before it's too late. This is not a deadline that can be moved.
Next time: The Pre-Bug Bugs . . .
Mr. Garcia is a Director in the firm's Title Insurance Department. E-mail srg@kpclegal.com.